Life insurance is often thought of as something you buy to protect loved ones in the event of your death. Viewed through this lens, the premiums you pay seem more like an expense than an investment. On the other hand, an insurance policy that will take care of your family members and your business partners could let you spend more of your money guilt-free as you age and ease into retirement. From this perspective, life insurance is a great investment and well worth the cost. Here’s why.
“The goal of leaving a big inheritance to your children, a faith group, or a favourite charity can discourage a lot of people from tapping into their wealth and enjoying the rewards of their hard work,” says David Camps, Vice-President of Marketing and Client Experience at Lawyers Financial. “That’s unfortunate because the strategic use of insurance can let you access your net worth while you’re alive, knowing the policy will take care of your beneficiaries.”
As your Lawyers Financial Advisor can explain, there are many ways to protect your family and your business interests. The key is assembling the right combination of policies. That’s what our advisors do best.
PROTECTING YOUR FAMILY
The younger you are, the less likely you are to have substantial assets that can be handed down to your children or used to pay off debt. As for the assets you do have, the cost of passing them on may erode their value (probate fees and estate taxes could kick in).
That’s why you should consider an insurance policy such as Lawyers Financial Term 80 Life insurance. It provides a cost-effective and tax-efficient way to protect your family and ensure their financial well-being. A guaranteed payout could be used to:
- Pay off your mortgage.
- Pay off other outstanding debts.
- Replace your income.
- Pay for your children’s education.
- Provide cash to pay probate fees and taxes without needing to liquidate assets.
PROTECTING YOUR BUSINESS
If you are a sole practitioner or member of a small firm, an investment in life insurance has two immediate benefits:
1. It can be used as collateral
A term life insurance policy can be assigned to a lender as collateral for a loan or line of credit. Upon your death, the insurance company would pay the loan balance and anything left over from the insurance benefit would be paid to your beneficiaries.
Consult with your Lawyers Financial Advisor if you anticipate the need for business financing. They can help you put the right, and most affordable, coverage in place.
2. It can help in business succession
If you are a partner in a law firm, you likely have a buy-sell agreement that addresses the death of a partner. Life insurance can help all of you fulfill the terms of your agreement in a simple, cost-effective manner, allowing you and your remaining partners to focus on your business.
Whatever your situation, life insurance is an investment and an important part of a financial plan that allows for more financial options while you are alive and still provides a guaranteed payout to your beneficiaries down the road.
Originally published 08 August, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
WINNIPEG _ A subsidiary of Great-West Lifeco Inc. has signed a deal to buy U.S. investment manager Personal Capital in a deal worth at least US$825 million.
Under the agreement, Empower Retirement will pay US$825 million, plus up to an additional US$175 million subject to the achievement of target growth objectives.
Great-West says Personal Capital is a hybrid wealth manager that combines a digital experience with personalized advice delivered by people.
The company says the deal will combine Empower retirement plan services and financial tools with Personal Capital’s digitally oriented personal wealth management platform.
IGM Financial Inc., a sister company to Great-West, holds a stake in Personal Capital and says it expects US$176.6 million in proceeds from the deal, plus up to an additional $24.6 million in possible additional payments.
The transaction is expected to close in the second half of 2020, subject to required regulatory approvals.
The excerpted article was written by Rebecca Lake | SmartAssest
If you can afford to pay off your mortgage ahead of schedule, you’ll save some money on your loan’s interest. In fact, getting rid of your home loan just one or two years early could potentially save you hundreds or even thousands of dollars. But if you’re planning to take that approach, you’ll need to consider if there’s a prepayment penalty, among
Basics of Paying Off a Mortgage Early
Many homeowners would love to fast forward to when they own their houses outright and no longer have to worry about monthly mortgage payments. As a result, the idea of paying off their mortgage early could be worth exploring for some people. This will allow you to lessen the amount of interest you’ll pay over the term of your loan, all while giving you the ability to become the home’s full owner earlier than expected.
There are a few different methods by which you can go about paying early. The simplest method is just to make extra payments outside of your normal monthly payments. Provided this route doesn’t result in extra fees from your lender, you can send 13 checks each year instead of 12 (or the online equivalent of this). You can also increase your monthly payment. By paying more each month, you’ll pay off the entirety of the loan earlier than the scheduled time.
If you’re considering paying off your mortgage ahead of time, make sure you avoid these five critical mistakes.
Mistake #1: Not Considering All of Your Options
It can be very tempting if you come into some extra money to put that toward paying your mortgage off ahead of time. However, getting out of debt a little bit earlier may not be the most remunerative choice to make. To illustrate this, let’s look at an example.
Let’s say you’re considering making a one-time payment of $20,000 toward your mortgage principal. Your original loan amount was $200,000, you’re 20 years into a 30-year term, and your interest rate is 4%. Paying down $20,000 of the principal in one go could save you roughly $8,300 in interest and allow you to pay it off completely 2.5 years sooner.
That sounds great, but consider an alternative. If you invested that money in an index fund that represents the S&P 500, which averages a rate of return on 9.8%, you could earn $30,900 in interest over those same 10 years. Even a more conservative projection of your rate of return, say 4%, would net you $12,500 in interest.
Everyone’s financial situation is unique, and it’s very possible that the notion of being out of debt is so important to you that it’s worth a less than optimal use of your money. The important thing is to consider all of your options before concluding that paying off your mortgage earlier is the best path for you.
Mistake #2: Not Putting Extra Payments Towards the Loan Principal
Throwing in an extra $500 or $1,000 every month won’t necessarily help you pay off your mortgage more quickly. Unless you specify that the additional money you’re paying is meant to be applied to your principal balance, the lender may use it to pay down interest for the next scheduled payment.
If you’re writing separate checks for extra principal payments, you can make a note of that on the memo line. If you pay your mortgage bill online, you might want to find out whether the lender will let you include a note specifying how additional payments should be used.
Mistake #3: Not Asking If There’s a Prepayment Penalty
Mortgage lenders are in business to make money and one of the ways they do that is by charging you interest on your loan. When you prepay your mortgage, you’re essentially costing the lender money. That’s why some lenders try to make up for lost profits by charging a prepayment penalty.
Prepayment penalties can be equal to a percentage of a mortgage loan amount or the equivalent of a certain number of monthly interest payments. If you’re paying off your home loan well in advance, those fees can add up quickly. For example, a 3% prepayment penalty on a $250,000 mortgage would cost you $7,500.
In the process of trying to save money by paying off your mortgage early, you could actually lose money if you have to pay a hefty penalty.
Mistake #4: Leaving Yourself Cash-Poor
Throwing every extra penny you’ve got at your mortgage is an aggressive way to get out of debt. It could also backfire. If you don’t have anything set aside for emergencies, for example, you could end up in a tight spot if you get sick and can’t work for a few months. In that case, you may have to use your credit card to cover your bills or try to take out an additional loan.
If you don’t have an emergency fund, your best bet may be to put some of your extra mortgage payments in a rainy day fund. Once you have three to six months’ worth of expenses saved, you may be able to focus on paying down your mortgage debt.
Mistake #5: Extending Your Loan Term When Refinancing
Refinancing can save you money in multiple ways, as it allows you to convert to either a shorter or longer loan term, depending on what’s best for you. So if you’re 10 years into a 30-year mortgage term, you could potentially refinance to a 10-year term and shave off 10 years. On the flip side, you could go for another 30-year term to lower your monthly payments.
However, loans with shorter terms tend to have lower interest rates, allowing you to both save on interest and reach full ownership much sooner. In some cases, though, refinancing could cost you more in the long run, especially if you’re planning to extend your loan term. Before you refinance, it’s a good idea to crunch some numbers and figure out whether having a longer mortgage term really makes sense.
Don’t forget closing costs either. If your lender agrees to let you roll those costs into your loan, you could end up paying more money. After all, you’ll now be on the hook for interest on a larger loan amount.
Whether you should pay off your mortgage early ultimately depends on how much money you have to spare, what your alternatives are and other factors that are unique to you. But if it’s something that’s legitimately on your radar, make sure to seriously consider all of your options.
Although often known for their expertise in investing and financial planning, many financial advisors are knowledgeable about mortgages and home purchases. So if you’re struggling to make a decision on your own, consider consulting with a local financial advisor.
Tips for Buying a Home
- To guide you through a major financial decision like the purchase of a home, you may want to talk to a financial advisor. Luckily, SmartAsset’s advisor matching tool can help you find a suitable financial advisor in your area to work with. Get started now.
- Securing a mortgage can be a stressful and confusing process. For starters, you need to figure out what term is best for you, whether you want a fixed or variable interest rate and where to get the best mortgage rates.
Insurance giant to replace staff by outsourcing services from Winnipeg-based telemarketing company
· CBC News Manitoba
Canadian insurance giant Canada Life is laying off dozens of employees working in three provinces.
In an emailed statement to CBC, the company confirmed Tuesday it is laying off 85 employees in its Winnipeg, Montreal and London, Ont., offices.
The insurance company cited shifting demographics and changing the way it engages with customers in its decision.
Canada Life says it’s partnering with 24-7 Intouch Solutions — a multinational telemarketing company based in Winnipeg — to offer bilingual services and longer hours.
“24-7 has the tools and infrastructure to provide longer service hours for our customers,” vice-president Diane Bezdikian said in the statement.
She added the change “will provide greater flexibility in servicing our customers in both official languages.”
When asked by CBC, a company spokesperson would not say how many employees would be laid off in each of the three affected cities.
Three life insurance companies recently came together under the Canada Life banner when Great-West Life Assurance in Winnipeg, London Life Insurance and Canada Life Assurance consolidated as part of a restructuring process.
No jobs were cut as a result of that announcement last spring.
The excerpted article was written by Isabella Kirkwood
In its 2019 Insurance Industry Outlook, Deloitte claimed Insurtech is fundamentally changing the rules of the game, driving a new innovation ecosystem with both threats and opportunities for industry leaders.
Despite the exponential surge of connectivity and digitization, some insurance providers still hold on to outdated notions about the industry’s ability to ward off disruption.
“We are using the best of technology tools to significantly complement human expertise.”
“We are living in an age of disruption. How we engage with our customers is evolving and consumer expectations are changing,” said Don Forgeron, president and CEO of the Insurance Bureau of Canada, for a survey the group released last year. “As insurers, we need to have the ability to adapt to the rapid changes that are impacting our business.”
While these circumstances have left the industry more archaic and less agile in comparison to other financial services sectors, it has made room for Insurtech startups to target the around 30 percent of Canadians currently lacking any life insurance coverage. Enter: PolicyAdvisor, an Insurtech startup based in Toronto, which is looking to build a new kind of insurance experience. The company combines modern technology and human expertise in an effort to simplify the insurance-buying process for consumers. Most notably, the company claims it’s outperforming the traditional insurance broker.
Jiten Puri, CEO of PolicyAdvisor
PolicyAdvisor harnesses data from multiple sources, using algorithms that scan hundreds of complex insurance documents to identify the right policy match for a customer. PolicyAdvisors’ approach is markedly different from other movers and shakers in Canadian Insurtech, which generally target the business and enterprise segment.
ProNavigator, is an example, having built a natural language processing AI platform that provids insurance companies with 24/7 virtual assistants. Montreal-based Breathe Life provides life and health insurers, distribution organizations, and advisors with white-label solutions to quickly and cost-effectively onboard new clients. Finaeo, another notable Canadian Insurtech company, has created workflow platforms for insurance advisors that help with repetitive tasks.
PolicyAdvisor not only works with consumers but is also an independent insurance advisor that directly provides policies to those consumers. BetaKit spoke with PolicyAdvisor founder and CEO Jiten Puri about how he’s looking to address gaps in life insurance, and what’s on the horizon for the company.
Puri, previously worked as a banker with Morgan Stanley out of New York, looking after mergers and acquisitions in the FinTech space. He called life insurance the last vestige of financial services that has yet to see the evolution other segments have embarked on. Canadian companies like Wealthsimple, Koho, Borrowell, and formerly Planswell, have all gone after a particular consumer segment with their own technology offerings. Borrowell, for example, deals with lending, while Wealthsimple takes on investing, and Koho deals with saving and spending. Puri saw an opportunity to bring together his understanding of, and connectivity in, the financial space to innovate insurance in Canada.
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By Tara Deschamps
THE CANADIAN PRESS
TORONTO _ Two of Canada’s largest insurance companies got lifts from the Asian market in their latest quarter.
Sun Life Financial Inc. said its overall net income surged 24 per cent to $719 million in its fourth quarter, with its Asian operations contributing $136 million, or nine per cent more than in the same period the year before.
The company also racked up $361 million in Asian insurance sales, a 44 per cent or $110-million increase compared to the same period in 2018. By contrast, insurance sales in Canada rose four per cent while U.S. sales were down four per cent.
The earnings come as Sun Life _ like many other insurers _ have been focused increasing attention on the Asian market. Sun Life recently formed a 15-year partnership with Tien Phong Commercial Bank in Vietnam, signed a distribution agreement with Nobu National Bank in Indonesia and also launched sales of sharia-based products with Bank Muamalat in the region.
Asia is highly under-penetrated for insurance so it’s really a distribution game, Neil Haynes, the company’s chief financial officer and senior vice-president of Sun Life Financial U.S.
“It’s not a pricing game in Asia, so we feel good about the profitability of our products and as the scale continues to come through, we are expecting to see this benefit of scale flowing through in our new business strain,” he said.
“Our bigger markets are Hong Kong and the Philippines and they’re both profitable markets. As we continue to build scale there in particular you would expect some of the benefits to come from there, in particular.”
Meanwhile, another Toronto-based insurance business, Manulife Financial Corp. shared that its earnings were also helped by opportunities in the continent.
The company boosted its quarterly dividend 12 per cent after it capped a stronger 2019 with double-digit growth in Asia.
Manulife said it would increase its payout by three cents per share to 28 cents, payable on or after March 19 to shareholders of record on Feb. 25. It added that it earned $1.23 billion for the three months ended Dec. 31, up from $593 million a year earlier.
Last year’s net income included a restructuring charge. Excluding one-time items, core earnings increased 10.5 per cent to $1.48 billion from $1.34 billion.
Those earnings came after Manulife launched in Vietnam and Cambodia its ManulifeMOVE program, which uses a mobile app and tracking devices to monitor how much consumers walk and offer them discounts on insurance plans based on their number of steps. It also debuted an online insurance platform in collaboration with DBS Bank for the Singapore market and enhanced its electronic claims platform in Hong Kong, Vietnam, and Japan, where it was hampered by lower new business volumes and changes to tax rules.
“Despite the headwinds in Japan…we were able to deliver a resilient five-per-cent core earnings growth in quarter four and 11 per cent for the full year,” said Anil Wadhwani, Manulife Asia’s president and chief executive on a Thursday call with analysts.
“We continue to see very strong momentum in geographies like Hong Kong…So despite some of the challenges….we’re pretty pleased with the resilient performance that we showed in Asia.”
Sun Life’s earnings equalled $1.22 per share in the three months ended Dec. 31, up from 96 cents per share or $580 million a year earlier. For the full year, its net income rose by 3.8 per cent to $2.62 billion.
Manulife earned 73 cents per diluted share up from 65 cents per share in the prior year and one cent below analyst forecasts, according to the financial markets data firm Refinitiv.